ICEA calls for GST reduction on mobile phones to boost affordability,demand

New Delhi: As the country awaits GST rate rationalisation, the India Cellular and Electronics Association (ICEA) on Tuesday urged the government to place mobile phones and components under the 5 per cent GST slab reserved for essential goods.

Calling the current 18 per cent GST rate “regressive,” the industry body argued that mobile phones, now vital for over 90 crore Indians, should be treated as necessities in the upcoming tax reform.

“The mobile phone is no longer an aspirational good; it is an essential digital infrastructure for education, healthcare, financial inclusion and governance. It should rightly be taxed at 5 per cent GST, in line with the Prime Minister’s GST reform agenda and his vision of a $500 billion electronics ecosystem,” said Pankaj Mohindroo, Chairman, ICEA.

He added that India cannot create an inclusive digital economy if devices remain unaffordable. “Placing mobile phones in the 5 per cent GST slab will restore affordability, stimulate demand and accelerate India’s journey towards universal digital access,” Mohindroo said.

The central government has proposed rationalising the existing four-slab structure into two primary rates, 5 per cent and 18 per cent, alongside a special 40 per cent slab for luxury and sin goods.

Under the proposal, about 99 per cent of items currently taxed at 12 per cent are expected to move into the 5 per cent bracket, while 90 per cent of goods in the 28 per cent slab, including white goods, are likely to shift to 18 per cent.

According to ICEA, annual domestic consumption of mobile phones has dropped from nearly 300 million units to about 220 million units since the GST hike to 18 per cent in 2020. However, the industry sees significant potential for growth if rates are reduced.

Driven by the government’s ‘Make in India’ initiative, mobile phone production has surged from ₹18,900 crore in FY15 to ₹5.45 lakh crore in FY25. Exports have crossed ₹2 lakh crore, making India the world’s second-largest mobile phone manufacturer, the association noted.